The investment strategy focuses on building profitable and sustainable businesses that permanently strengthen local economies, raise living standards and meet the needs of a rapidly growing population.

SilverStreet Capital strives for positive development outcomes across the portfolio. An important component of positive development outcomes is the ESG sustainability of projects, which we target achieving, on a project-by-project basis, by applying a comprehensive set of ESG standards. SilverStreet Capital conducts an independent annual review of the progress that each company is making in implementing the highest ESG standards possible using our own Responsible Investment Code and other international standards. 

Specifically, core principles from our Responsible Investment Code state that the portfolio companies will:

• comply with all applicable laws and regulations (including Luxembourg and UK laws);
• as appropriate, minimise adverse impacts and enhance positive effects on the environment, workers, and all stakeholders;
• commit to continuous improvements with respect to management of the environment, social matters and governance;
• work overtime to comply with the relevant international best practice standards, with appropriate targets and timetables for achieving them; and
• employ management systems which effectively address ESG risks and realise ESG opportunities as a fundamental part of a company's value.

Risks

Due to the nature of the agriculture sector, the identification and management of climate related risks is integral to all investment decisions, and throughout the holding period. The principle climate-related risk for SilverStreet Capital's portfolio companies is climate variability - the risk that our businesses in the agricultural sector will suffer due to unpredictable weather, changes in the environment or seasons, water security, and temperature changes.

Temperature Variability

To mitigate against possible changes in temperature, SilverStreet Capital exclusively invests in the best possible locations for the production of each crop or animal. This protects our production against changes in the environment.

Water Use

All our operations manage their water use and take extreme care to minimise volumes used. Technologies to aid in water management and improve water use efficiency include flow meters, variable speed drive pumps (VSDs), drip and micro-sprinkler irrigation systems, soil moisture probes, weather stations, evaporation pans and automation methods.

We, additionally, practice minimum tillage on our farms, and teach this to smallholder farmers. This results in increased moisture retention in the soil, reducing irrigation needs and enhancing drought tolerance in lower rainfall years.

Energy Use

We continue to implement clean energy solutions, and solar and hydroelectric power developments to help reduce reliance on fossil fuels and unreliable grids. This includes a solar power facility in Namibia and a hydro-electric power facility in Tanzania.

Opportunities

Globally, agriculture is under pressure to produce more, on the same area of land, and with less resources. The majority of the world's population growth between now and 2050 will come from Africa, with estimates from the UN showing an increase from around one billion people now to over two billion in 2050. Most countries have food deficits already and a huge sustainable increase in yield productivity is necessary to meet future food requirements. This challenge presents a unique opportunity to use strategically invested capital to fix some of the challenges in the various crop value chains. Specifically, to raise productivity sustainably without perpetuating agricultural practices that harm the environment. This can be achieved through investment into products and practices that can increase yields for smallholder farmers across Sub-Saharan Africa, without the need to increase land areas, which results in vast greenhouse gas emissions.

To achieve this smallholder farmers need access to:

• markets to enable them to grow higher value crops;
• high quality improved seed;
• training in conservation farming techniques;and
• storage facilities.

Using a hub out-grower model, it is possible to integrate these solutions into a centralised investment. In this model a business 'hub' is established that includes processing of a higher value product and provides assistance to smallholder farmers to help grow this product. The hub can also provide technical support, training and improved inputs - enabling farmers to reach their production potentials sustainably. This innovative, and integrated solution has proven successful in galvanising markets, raising incomes and reducing unsustainable land practices.

We identify, monitor and manage climate related risks in the short-, medium-, and long-term. This depends on the risk or opportunity that we have identified. For example, changing crop varieties to better suit changing environments is a seasonal decision. Water security, and protecting our investments from changes in rainfall, is a significant infrastructural development, for example building a dam. We therefore utilise >20 year timescales.

SilverStreet Capital identifies and manages climate-related risks through all stages of the investment process due to the integral nature of climate risks in the agricultural sector. Creating efficiencies, reducing negative impacts, and reducing risks of climate change permeates all our strategic decisions.

• During screening we exclude businesses that are not situated in optimal locations for agriculture.
• While conducting due diligence we further this analysis with the help of specialised agricultural teams that conduct soil, location and risk analyses on the investment, ensuring the best possible environments for specific cultivars.
• Throughout asset management, SilverStreet Capital continues to ensure investments assess and manage climate related risks and impacts.

SilverStreet Capital has drafted a climate change policy that will commence implementation in Q2 2020, although many actions are intrinsic to business operations and are being implemented. The policy commits SilverStreet Capital to support portfolio companies to:

• be energy efficient and reduce carbon emissions, with specific attention to on-site renewable opportunities;
• work towards reducing agricultural practices that emit carbon, such as soil tillage and land clearing;
• monitor and manage water use efficiently;
• continually adapt to be more resilient and robust to changing climates, such as reassessing crop varieties, irrigation technology, and other such measures; and
• support our stakeholders such that they are less vulnerable to climate change. This includes teaching conservation farming techniques and increasing access to modern crop and livestock varieties to smallholder farmers in our networks.

The Fund Manager and the Investment Advisor has put in place conflicts management systems and procedures to manage any potential conflicts of interest. These also cover management of any conflict arising through the Investment Advisor’s strategic relationships with local operating companies or partners. To the extent that there are other conflicts of interest on the part of the General Partner, the Fund Manager and/or the Investment Advisor, the Fund and any other account, company, partnership or venture with which it is, or they are now or later may become affiliated, they will endeavour to treat all of such entities equitably.

The Fund Manager shall be responsible for identifying any potential conflicts of interest that may arise in connection with the Fund. The Fund Manager shall, upon identifying any conflict of interest, consult the Advisory Committee in connection therewith. The Advisory Committee is made up of representatives of the key investors in the Fund.